8/7/2019 (2011) DoD Acquisition Reform: Something Old, Something New

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8/7/2019 (2011) DoD Acquisition Reform: Something Old, Something New

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DEFENCE ACQUISITION

While the UK defence establishment is smaller than that of

the US, many of their dynamics and challenges are identical.

The Department of Defense’s (DoD’s) Quadrennial Defense

Review (QDR) process is long established and a well-defined mechanism,

versus the more pragmatic and sporadic British Defence Review, of which

the Cameron administration’s Strategic Defence and Security Review

(SDSR) is the latest in a sequence of reviews dating back to the 1950s.1 

The UK, however, has repeatedly sought to make sense of the defence-

industrial relationship in recent years with the MoD-led Defence Industrial

and Technology strategies, which aim to best target investment for the

longer term. The DoD, by contrast, could be seen by the casual observer at

the macro-level as having taken a more laissez-faire approach in an era of

plentiful budgets and highly demanding military operations abroad.

US DoD acquisition reform can be seen against the backdrop of a newly

elected administration that, once having taken immediate measures

to safeguard against economic depression, needed to address govern-

ment spending patterns. Being a Democrat administration, there was

an additional requirement to approach the subject of national security

spending with caution in order to reduce any perceptions as to being

soft on defence spending.

The first step in the administration’s acquisition reform efforts emerged

in May 2009 with the passing of the Weapon Systems Acquisition Reform

Act.2 Driving the Act politically was the identification of 95 major projects

that had a cumulative cost over-run of some $295 billion. To those familiar

with the defence acquisition process, the Act identified little new. Concerns

over the level of systems engineering skill in DoD, the role of combatant

commanders in defining requirements, issues of cost/schedule/perfor-

mance trade-offs, bureaucratic conflicts of interest, technological maturity

assessment and independent cost analysis are all issues in which the acqui-

sition community on both sides of the Atlantic are well versed.

DoD Acquisition Reform:

Something Old, Something New…Dr Jeffrey Bradford, a transatlantic defence and national security consultant, formerly with Babcock

International Group, and a prior specialist with Arthur D Little, reviews the US approach to reining

in the cost of acquisition in existing procurement programmes

Robert Gates, US Secretary of Defense, warned Congress that,

“We still live in a very dangerous and often unstable world.”

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8/7/2019 (2011) DoD Acquisition Reform: Something Old, Something New

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DEFENCE ACQUISITION

EADS/Northrop Grumman team had its competitor squarely in the cor-

ner. Following the crisis and concerns as to the economic vitality of the

US, Boeing has regained momentum. With a presidential election cycle

less than two years away, domestic politics can only play an increasing

role in the development of this contest.

7

2. Project Management – the Joint Strike Fighter

The Joint Strike Fighter ( JSF) programme remains the largest and most

complex procurement in the DoD portfolio. It has also been somewhat

inoculated against cancellation, by both the end of the F-22 Raptor

production line and a long list of international partners keen to replace

their F-16 fleets. Originally, the JSF was conceived as a three-variant

procurement – STOVL (short take-off and vertical landing) – for use

by the USMC and UK’s Royal Navy (succeeding the AV-8B Harrier), a

naval variant to replace US Navy F-18 Hornets and an air force version

to replace the F-16. Spiralling project costs led to the project manager

being replaced in 2010. More recently, the STOVL variant was placed

on a two-year probation period. Furthermore, following the UK’s SDSR,

the Royal Navy will now take delivery of the conventional F-35C variant,

instead of the F-35B STOVL version.

The DoD’s response represents a mixed carrot-and-stick approach for

industry. Replacing military programme managers on the one hand,

threatening industry with termination of a variant if it cannot be brought

under control on the other, while also accelerating some spending to field

selected aircraft sooner.

3. Commercial innovation – Littoral Combat Ship (LCS)

The latest development in the Littoral Combat Ship programme has been to

procure two types of vessel rather than to down-select to a single design.

The US Navy and contractors then agreed a fixed price for 10 vessels,though with the novelty that the US Navy signs an annual contract for two

ships which it can terminate if cost and production targets are not met.8 

This sample of programmes illustrates the US DoD application of many

classic tools for acquisition reform at a time when budgets are stretched

owing to macro-economic conditions and over-extension with overseas

deployments. A combination of cost-saving in the back office with pres-

sure on vendors and political partners elsewhere are methods with which

CEOs in many industries would feel familiar. ■

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The DoD leadership, aware of the bow-wave of new procurement

programmes alongside the cost of maintaining forces on operations,

initiated a plan to seek $100 billion in cost savings in the 2012 defence

budget – DoD procurement in 2009 was some $375 billion, against an

overall US government procurement spend by all departments of $560billion.3 According to reports, the air force found $34 billion; the army

$29 billion; the navy around $35 billion; and some $2 billion was also

identified from special operations budgets.4

 January 2011 saw an early announcement of next steps, including

consolidation of Information Technology infrastructure and cancellation

of the long-suffering US Marine Corps Expeditionary Vehicle system. In

addition, the development of the STOVL Joint Strike Fighter variant (for

primary use by the USMC and Royal Navy) was put on a two-year hiatus.

Alongside the headline-grabbing cuts, an emphasis is being put on

building procurement skills among the acquisition community and

reinvesting cost savings on more urgently needed requirements.5 

Following the release of the new acquisition reform plans, the Secretary

of Defense, Robert Gates, travelled to China for a bilateral meeting,

during which the Chinese Air Force publicly tested a new generationstealth aircraft. Against the testing of the J-20 and discussion in recent

months of ‘carrier-killing’ missiles targeting US Naval supremacy, one

can only wonder how long the resource pressure will endure at the

Pentagon before political concerns lead to a more pragmatic view. If

nothing else, the actions of the past year will curb some of the excesses

in defence procurement and refocus minds on deriving value from the

process rather than simply perpetuating the system.

While this analysis yields no new insights into the basic dynamics of

procurement, DoD responses to four programmes – the presidential

helicopter, Joint Strike Fighter ( JSF), Future Tanker (KC-X) and Littoral

Combat Ship (LCS) – perhaps give an inkling into what will drive

Departmental and US acquisition thinking over the coming few years.

1. Protectionism – the Presidential Helicopter and future tanker

(KC-X) programmes

One of the earliest casualties of this exercise was suspension of the

presidential helicopter programme – an important signal from the

White House as to the seriousness with which they treated cost over-

runs at a time of national economic challenge.6 Additionally, and per-

haps unintentionally, against the backdrop of international defence

procurement politics and protectionist tendencies, the fact the presi-

dential helicopter involved a European player could only have played

well to a domestic political audience keen to preserve domestic US

acquisition capabilities and business.

As for the replacement airborne tanker, while the Boeing and EADS/

Northrop Grumman pendulum has swung back and forth in the past few

years, one can suspect that political exigencies will lead to either a two-

plane solution or a domestic preference. Prior to the financial crash, the

The actions of the past year

will curb some of the excesses

in defence procurement